[quote=lkline]I think things will have to get a whole lot worse in the US before I’d consider this option.[/quote]As the ship sinks, it’s easy to say, "At least there’s this little patch of air I can still breathe."
For your sake, I hope I’m wrong, but this sounds like "boiling frog" talk. The time to leave a sinking ship is well before the water reaches your eyeballs, but most people can’t see that far.
Maybe just a fluff piece, but something to consider. I submitted this to the DD:
http://www.ajc.com/news/nation-world/view-from-abroad-us-1397423.html
Aloha, Steve.
I’d love to hear where you got this from:
Countries offering first-world infrastructure and where real estate is relatively affordable include Argentina, Australia..Look at any real estate index - the EIU, for example - and you'll find that real estate in Australia is anything but affordable, and at the heights of a rather big bubble.
[quote=Travlin]Bravo Dogs and Farmer Brown
Becoming an expat does not appeal to me, but I can understand why one would do it, for many reasons not related to taxes. It certainly requires courage to take a step that radical. But if we had risked our lives repeatedly as Dogs has, we too would understand that preserving liberty requires concrete actions, and a willingness to pay a price much higher than money. That is courage of a different order.
The current trends in the US are ominous. I’m acquiring a real appreciation for the bravery of our founders. I hope I never have to find out it I could measure up. But, I’m not going anywhere. And I’m not going quietly.
Travlin
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Well stated Travlin.
I sympathize with both these points of views. Most of us have ancestors who came here to have a better life. Leaving the comfort and familiarity of a native land to come to an entirely new land rarely is an act of cowardice. It usually takes a certain type of courage to do that. But sometimes fear drives this action as well. They are no longer around for me to ask but my paternal grandparents left Russia at the time of the revolution (and wisely so since those in their village who didn’t were slaughtered to the last man, woman, and child) while my maternal grandparents left Germany a decade before Hitler took power. From what I’ve gathered, they all saw the handwriting on the wall and, in retrospect, would have been powerless to stop what occurred.
It is sad that the expatriation rate in this country is climbing and unfortunately, we’re losing more of the very citizens that it would be better not to lose. But the fact that intelligent people are increasingly choosing to do so is telling and their actions are understandable. Something’s rotten in the US or should I say, with our leaders, with our government, with its policies, and with how the average citizen is being affected.
While long ago, I learned that losing one’s fear of dying was the key to living, I’m not quite like "balls of steel" Bob. I do have certain fears (and if he were honest with himself, so does Bob obviously, which is why he was posturing). Even more so, I fear for my children. I might, in fact, even encourage them to live elsewhere, if necessary and if they’d choose. But on the other hand, I resent being made to fear. And even more so, I resent being put under pressure to even consider leaving my country. Quite frankly, I don’t see us stopping what is occurring until things are played out to the bitter end. But for myself, no one’s going to push me to leave my country. I look at the situation as being akin to being on a ship and a plague of rats are causing us to want to abandon ship and leave it to the rats. It’s the rats that need to go overboard, not us.
I found it interesting to read the book, Strong on Defense. In it, Sanford Strong describes what happens and what to do when one is confronted by violent crime. One incapacitating factor of these confrontations is the victims’ fear of getting injured or killed. It prevents them from doing what needs to be done. And interestingly enough, it’s this very fear that often results in the victims ultimately getting … severely injured (both physically and psychologically) or killed. One needs to assume that, if they defend themselves, they will likely get hurt but, if they don’t act, they may very well die. Right know, everyone is afraid of getting hurt (on an individual basis and on a national basis) so they’re not acting. Unfortunately, time almost always works against the victims. The longer they wait, the more difficult and dangerous it becomes to extract themselves from the situation until eventually, there is no way out. How long are we going to wait?
I’m reminded of George Patton: "No bastard ever won a war by dying for his country. He won it by making the other poor dumb bastard die for his country." Right now, TPTB aren’t being made to feel any pain or pay a price. Why should they change their actions if there are no painful consequences or costs?
And although expatriation may provide some short-term relief, for those who are leaving or have left, I have news for you … it’s going global and there will be no place to hide.
[quote=sim]I’d love to hear where you got this from:
Countries offering first-world infrastructure and where real estate is relatively affordable include Argentina, Australia..Look at any real estate index - the EIU, for example - and you'll find that real estate in Australia is anything but affordable, and at the heights of a rather big bubble. [/quote] I'll second that emotion...... of course if you come loaded with money able to stay out of debt, and you stay out of Sydney/Melbourne/Brisbane/Perth, AND you're prepared to not consider your living accomodation "an investment" (ie you can afford to take a hit), you'd be hard put to find a better place........ We'll be selling soon for anyone who enjoys warm weather... ;-) Mike
signalfire-
I’m going to refrain touching your first paragraph as it’ll just derail the thread. However with respect to ignoring US laws and compliance rules when overseas, I have to disagree, at least as the situation stands now. As it is now, compliance is intrusive and a big burden (in terms of time and money), but it is still possible to be compliant. My personal advice for expats and US businesspeople overseas is, whenever possible, to comply with all the rules for now if at all possible.
To explain my reasoning, let’s be generous and make the assumption that one can dodge any direct incarceration or fines by the US. First problem… while US influence is diminishing in general, it currently does have a lot of clout in the banking world and can make life difficult for you. Perhaps not take your money, but very possibly convince your foreign bank to dump you as a client. Second, ignoring those laws and rules has the potential to keep you from renewing your US passport, and if you don’t have a second citizenship then you’re SOL come passport expiration time. Third, and maybe most important for an expat or overseas businessperson, is that it can create a mark on your criminal record, and THAT can prevent you from getting residency visas or citizenship in other countries. Many if not most countries require criminal or police background checks for long term visas or naturalization (they want to make sure you’re on the up and up before taking you in), and if your home country flags you as a tax evader or criminal you probably won’t make the cut. Even a small and relatively under-the-radar country like Mongolia requires an apostilled criminal/police background check from one’s home country for any long term or residency visas. So even if a country doesn’t have a tax treaty or extradition treaty with the US, it doesn’t mean squat if they don’t let you in in the first place.
Yes it’s intrusive, yes it’s an unnecessary burden, and yes it’s mostly bull****… but life isn’t fair and sometimes you have to pick the least crappy option. There very well may be a point where compliance truly does become impossible and then a choice has to be made, but that point hasn’t come yet. Hypothetically speaking, my odds of getting away with non-compliance would probably be pretty good (being a small fish money-wise and Mongolia having no tax treaty or formal cooperation with the IRS), but I’m still doing everything I can to keep compliant. I am not a "follow the rules no matter what" kind of person by any stretch, but I have to say ignoring these particular rules are NOT worth the risk at this stage in the game.
Bytesmiths-
The tax on overseas income is bull****, but that’s not my big issue even though I’m not eligible for tax credits (because no tax treaty). My biggest concern is the gotcha traps that the US is putting in place for me and the scarlett letter they are effectively painting on US citizens in the eyes of the international business community. Though I don’t see it as highly likely, it is possible they can eventually make it impossible for me to live and run a business abroad.
- Nick
Decent enough article on CNBC of all places (not where I normally quote anything from since it’s mostly packed with idiots) on recent trends and reasons for renunciation of citizenship. Gotta love the part on women expats and American women’s groups abroad (page 2). Yeah, those evil American women’s clubs abroad I tell ya, boy are they unpatriotic and traitorous! (ok, sarcasm off now)
[quote=Farmer Brown]
Decent enough article on CNBC of all places (not where I normally quote anything from since it’s mostly packed with idiots) on recent trends and reasons for renunciation of citizenship. Gotta love the part on women expats and American women’s groups abroad (page 2). Yeah, those evil American women’s clubs abroad I tell ya, boy are they unpatriotic and traitorous! (ok, sarcasm off now)
http://www.cnbc.com/id/47064295
[/quote]
Yeah, I’m actually a little surprised at the relatively balanced treatment they give the subject. And while renouncing is not an option for us (we are actually going the other way… my wife will become a naturalized US citizen this year), some of the comments in the article match our own feelings. While I feel the US taxing of foreign income earned while living out of the country is utter BS, with the Foreign Earned Income Exclusion that is a tolerable nuisance (though if it gets axed or the US experiences major decline in the $ then it’ll hurt a lot). It’s all the compliance and reporting rules and the possibility of being locked out of being able to bank or do business outside the US (due to new FATCA requirements) that are pissing me off. When it comes to these, honest mistakes are just as potentially detrimental as intentional non-compliance or falsification. I’ll say it again, it really does look like they’re more interested in creating "gotcha!" traps to snare and make criminals out of innocent people so as to grab more money for the state and create disincentives for those US persons who might dare to leave the system. In my last post I said it is still possible to be compliant with all the reporting requirements, but the more I’ve been reading of all the reporting requirements, the more unsure I am of that statement. 2012 is going to be our first tax year with substantial foreign activity, and I’m very nervous that come next April I will miss some minutiae or detail in all the reporting and get the full smackdown treatment from Uncle Sam. For example, the civil penalties for non-willful violation of the FBAR reporting is up to $10,000 for each non-willful violation, and the penalties for failing to include something on the FATCA 8938 form starts at $10,000… WTF?!?
Not only that, but very soon I’ll be opening a business bank account here, and I have to wonder if next year or the year after they’ll change their mind and kick me to the curb to save themselves potential trouble. It’ll be hard to operate even a small-sized business if we are locked out of the banking system. I would either be forced to remove myself from the business and hope I can find a job in the US, operate in a under-the-table way that would technically be illegal as far as US reporting and compliance is concerned, or expatriate and relinquish citizenship. When stuck with those choices, expatriation doesn’t sound that absurd. For all I know that Peter Dunn guy in the article might be smarter than I am by simply expatriating not taking a chance with running afoul of current and future reporting traps…er… I mean "rules".
- Nick